Common Car Insurance Terminologies You Need to Know
A car insurance policy is a contract that has specific terms and conditions. When you avail of car insurance, the insurance company will provide you with policy wording, which details every information about the insurance policy.
As a vehicle owner, you must understand the insurance policy to avoid confusion and other problems when making a claim. Generally, the policy wording includes the insurance cover, exclusions, claim settlement. It also contains certain terminologies that are commonly used in the insurance industry but may be unfamiliar for individuals who are new to insurance.
Here are some car insurance jargons that you should fully understand when acquiring a car insurance policy:
Assured
Assured is the term used to refer to the person who purchased the car insurance policy. They are the ones covered by the conditions mentioned in the insurance policy.
Claim
The term is used to describe the request which the assured made to the insurance provider for payment or compensation for expenses under the car insurance policy terms.
Deductible
A deductible is the portion of the car insurance claim that the assured covers before the insurance company pays for the rest of the claim amount. This is compulsory for every claim filed by the assured.
Premium
The amount of money the assured will have to pay regularly, either monthly, quarterly, or yearly, to the insurance provider in exchange for insurance coverage.
Third-Party
Third-party is the term used to refer to a person or several individuals affected in a collision or other vehicular incidents.
Fair Market Value
Fair market value (FMV) is the determined price that the assured and insurance provider agreed upon to insure a vehicle. This assessed value is also used to settle a total loss claim.
Collision Coverage
This is one of the coverages included in comprehensive car insurance. Collision coverage helps the assured pay for expenses for damage incurred from a collision with another vehicle or object. However, it is still subject to deductible when the assured files a claim.
Comprehensive Coverage
Comprehensive coverage is another type of insurance coverage. It covers compensation for loss or payment for repair expenses of damages a vehicle incurred from non-collision incidents such as theft, fire and explosion, natural disasters, and malicious acts by third parties like riots, strikes, and civil commotions. This coverage is available for comprehensive car insurance and is also subject to a deductible.
Third-Party Liability Coverage
Third-party liability coverage is included in both comprehensive and CTPL insurance policies. This insurance coverage helps the assured pay for expenses incurred from damage or injury of a third party or their vehicle.
Acts of God Coverage
This type of insurance coverage financially protects the assured against natural perils such as storms, earthquakes, and floods.
How to Select the Right Car Insurance?
You need to review the broad range of car insurance policies that various insurance providers offer. This will help you find the right insurance coverage for your vehicle.
Moreover, you can also compare car insurance Ph through comparison websites such as iChoose PH to efficiently acquire insurance quotes and compare car insurance products from different insurance companies.
iChoose PH is the leading insurance comparison site in the Philippines. It enables consumers to make the right decision when selecting an insurance policy. Visit their website at iChoose.ph to view unbiased quotations from some industry’s leading insurance companies.
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